As companies compete to maintain a strong employee base, human resource (HR) departments nationwide are searching for the right incentives to attract the cream of the crop. A healthy benefits package is an important incentive for attracting and keeping talented employees.
Let's take a look at just how much benefits are worth, as they add up to a significant chunk of your overall compensation. Here is a breakdown of what an employer might spend annually on an average employee making about $39,000 in wages.
| Employee Compensation* | Cost to Employer (per hour)* | Cost to Employer (per year)** |
|---|---|---|
| Wages/Salaries | $19.56 | $39,276.48 |
| Benefits | ||
| Paid Leave Vacation, holiday, sick | $1.95 | $3,915.6 |
| Supplemental Pay Overtime/premium pay, bonuses | $0.72 | $1,445.76 |
| Insurance Life, health, short-term and long-term disability | $2.35 | $4,718.8 |
| Retirement/Savings Defined benefit/contribution | $1.22 | $2,449.76 |
| Legally Required Benefits Social Security, Medicare, federal/state unemployment, insurance workers' compensation | $2.22 | $4,457.76 |
| Benefits Total | $8.46 | $16,987.68 |
| Total Employee Compensation | $28.03 | $56,284.24 |
*Source: U.S. Department of Labor, Bureau of Labor Statistics, 2007
**These figures are based on the average cost to employer per hour and the yearly cost calculation assumes 251, eight-hour work days per year.
As you can see, the amount your employer spends on your benefits increases your total compensation significantly. In fact, benefits account for about 30 percent of the employer's cost for employee compensation. Wages and salaries account for about 70 percent of the cost. With a higher salary your benefits are worth even more.
No matter your salary, a health benefits plan should be considered a high priority in managing your finances. According to the Plan for Your HealthSM survey, nearly 90 percent of women who had recently changed jobs said they researched options before signing up for their current coverage, which shows that women recognize the importance of a health care plan in their financial portfolio. When evaluating your next job offer, or even your current compensation package, it is important to consider the value of the benefits package. Take some time with your prospective or current employee benefits director or HR director to understand your current benefit options and choose the best options for your health and your budget.